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ARTBA Survey Reveals Highway Contractors' Woes

Transportation contractors continue to deal with a very challenging economic environment that is impacting employment and capital spending decisions, with more than half of survey respondents saying they are working below 75% capacity.

May 10, 2011

Transportation contractors continue to deal with a very challenging economic environment that is impacting employment and capital spending decisions, with more than half of survey respondents saying they are working below 75% capacity.

“We cannot continue working day-to-day without long-term planning,” said one contractor in the American Road & Transportation Builders Association’s (ARTBA) latest “Quarterly Market Conditions” report. According to another: “It’s worse than ever before in my lifetime. Many competitors have closed their doors. We have been in a four-year downturn with no hopes of turning things around. Most left are just clinging to stay open.”

Fifty percent said they have fewer workers on payroll, while just 13% say they have more. Project backlogs, a key indicator of market stability and performance, are down with 56% reporting less work in the queue. Similarly, overall capital spending is lower at 49% of firms while profit margins are down at 61% of companies. And 74% say materials costs are climbing.

Contractors are very concerned about the continuing congressional delays over reauthorization of the six-year highway/transit investment bill. “We need a long-term transportation spending package,” said one. Another said his firm is putting capital spending and hiring on hold until the highway/transit bill is passed.

Expectations for the market in the remainder of 2011 are also low. “If I don’t pick up some contracts soon, I will have to shut down operations,” shared one industry executive.

Full results can be found at www.artba.org/contractorsurvey.

Source: ARTBA

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